Home Buying in Philadelphia>Question Details

Jt, Home Buyer in Philadelphia, PA

How do I get my depoist back if Im turned down by the mortage company?

Asked by Jt, Philadelphia, PA Mon Dec 6, 2010

At the last minute the mortage company decided that due to the many questions concerning zoning the deal could not approved. The house is a single family home but the lot is commercial. Wells Fargo said no go. Now its one week after the settlement date HOW DO I GET MY$5000. BACK?

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12
Hello.

Please check out paragraph 8, line 79 of the agreement of sale about mortgage contingency and paragraph 6, line 57 about zoning classification.
Your REALTOR can answer these questions.
You may contact me if you don't have an agent, and I will be glad to help you.
1 vote Thank Flag Link Mon Dec 6, 2010
Check with your Realtor.

Your purchase agreement should have had a financing contingency in it. It would have said--to oversimplify--that if you apply for a mortgage but are turned down, that the contract is void and your deposit is returned to you. It can get a lot more complicated, of course, but that's the general concept. I'm not licensed in Pennsylvania, so I can't tell you how it works there. However, in many areas the deposit is held in an escrow account at the real estate office of the listing agent. To get the deposit returned, generally both parties (the buyer and seller) must agree on its return, though that often isn't a problem. But check with your Realtor on the specific process to follow.

Hope that helps.
1 vote Thank Flag Link Mon Dec 6, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
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Hi again JT,

And to add to my previous comment, there's one other form to have both parties sign as well. It is called the "Agreement of Sale Release and Distribution of Deposit Money". Good luck!

Hope that helps!

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Best Regards,
Phong Lam, CSM
REALTOR®
CENTURY 21 Advantage Gold
2010 Oregon Avenue
Philadelphia, PA 19145
Business: (215) 465-1400, ext. 508
Fax: (215) 336-7793
Mobile: (267) 918-1880
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0 votes Thank Flag Link Tue Dec 7, 2010
Hi JT,

How are you? Thank you for your inquiry. I am sorry to hear about your deal. Assuming that you were working with an agent to put the offer together and have elected the Mortgage Contingency on the Agreement of Sales contracts and with you doing all of your due diligence in trying your best to provide all required documents to the mortgage company for review, you should be able to get your deposit Money back by getting your buyer's agent to write up a form called "Notice of Termination of Agreement of Sale" and have that forwarded to the listing agent to have the seller sign it. Then whichever broker that is holding the money in escrow should be able to write you the check of your deposit money back. Just note, it requires both parties' signatures on the termination form in order for the money to be released from escrow, if it is not fully executed, the money stays in the escrow account until further actions are exercised. For any further detailed legal advice, I would suggest speaking to an attorney.

Hope that helps!

***** If you like the answer - please consider giving it a Thumbs-up & making it a "Best Answer" ! Thank you! *****

Best Regards,
Phong Lam, CSM
REALTOR®
CENTURY 21 Advantage Gold
2010 Oregon Avenue
Philadelphia, PA 19145
Business: (215) 465-1400, ext. 508
Fax: (215) 336-7793
Mobile: (267) 918-1880
Email: Phong.Lam@c21ag.com http://www.c21ag.com
Professional Profile & Testimonials: http://www.linkedin.com/in/PhongDucLam
To connect with me: http://www.retaggr.com/AddMe/PhongDucLam
Buyers' Info: http://www.facebook.com/TriCountyPhiladelphiaHomebuyers
Sellers' Info: http://www.facebook.com/TriCountyPhiladelphiaHomeSellers

Century 21 Advantage Gold Top 21 Percent Award for 2009!
A referral from you would be the biggest compliment you could give me!
If you're interested, please ask me for your FREE Local Market Report for home values in your area!
0 votes Thank Flag Link Tue Dec 7, 2010
Hopefully you are working with an agent, and your agreement included a mortgage commitment contingency. Your lender should provide you with a letter stating that they will not approve your loan for this property. Your agent should prepare a withdrawal and release form stating that the deposit be returned to you, the Buyer.
0 votes Thank Flag Link Mon Dec 6, 2010
I really hope an agent was involved and at the very least there should have been a mortgage contingency on the Agreement of Sale. If you haven't had this contingency then you may have lost your money.
0 votes Thank Flag Link Mon Dec 6, 2010
it take some time but if your agent type a release letter you should get it unless you signed a contract were they keep the deposit money for you breaking contract or not being able to follow throw
0 votes Thank Flag Link Mon Dec 6, 2010
If you had a mortgage contingency in your offer or purchase and sales agreement and the bank will not issue you a mortgage commitment then you are due to have your deposit returned. In my experience when a buyer has been refused a mortgage commitment by a bank they are normally required to apply for a mortgage thru at least one more bank. Every bank has different rules and regs regarding zoning issues, etc and you may find you are able to secure a mortgage thru another lender. I have also found that using a local bank is the best approach as they understand the sometimes confusing issues that zoning, historical areas, etc can bring up.

If you have already contacted your attorney and agent to discuss the issue and all parties (including sellers) have agreed to release you from the contract then...to get your deposit back your agent should have you fill out a release of deposit form. This would then be forwarded to the listing agent and sellers, once signed you should get your deposit back from the listing agent's company. Good luck to you!

-Sunny Fellman, Realtor
Cape Cod, MA
sfellman@kinlingrover.com
0 votes Thank Flag Link Mon Dec 6, 2010
I am assuming the sellers agent is holding the $5000. Is it an escrow deposit or option fee? The offer to purchase will have the information about the loan and what happens to any deposit if the loan can not be obtained. Your agent should be advising you and they should be requesting it back from the sellers agent if they have it and if it was an escrow deposit. If it is an option fee it could be difficult for us to answer without knowing more.
0 votes Thank Flag Link Mon Dec 6, 2010
Do you have a mortgage contingency in your AOS? If so, it should provide for you to get your deposit back from the Realtor that is holding it. Do you have a Realtor representing you? If so, they should be discussing this with the selling broker. Assuming you don't have a Realtor, otherwise you wouldn't be asking this here, you may need to engage or have a friendly attorney first review the AOS to make sure you are entitled to the deposit back, then make a phone call or write a letter. It may take some time, but if your agreement is contingent on the mortgage, you should be able to recover the deposit.

also, if the property is zoned commercial, you may have a 2nd way out of the contract. Most residential agreements of sale require that the property be zoned residential. Good luck.
0 votes Thank Flag Link Mon Dec 6, 2010
JT,
Your realtor should be advising you about this. If there was a mortgage contingency and a mortgage commitment was issued then you may have to take legal action. Find out if the seller is attempting to take your deposit as damages for not closing. Sounds like a tough situation, but that is why real estate agent's are so important to the process. If your agent can't help, discuss this with their broker.
Best of luck!
0 votes Thank Flag Link Mon Dec 6, 2010
Do you have an agent and or an attorney, and if so what is he/she suggesting....consider asking either party the question.
0 votes Thank Flag Link Mon Dec 6, 2010
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